Treasury bills made up 22.36% of all marketable federal debt at the close of fiscal 2026, the largest fiscal year end share since 2020. The Monthly Statement of the Public Debt for September 30, 2026 puts bills outstanding at $7.118 trillion against $31.835 trillion of total marketable securities. A year earlier bills stood at $6.397 trillion and the share was 21.53%. Bills grew $721.1 billion over the twelve months while the rest of the marketable portfolio grew $1.399 trillion, so short dated paper absorbed about a third of the year’s new borrowing. Bills mature in a year or less and reprice at auction within weeks of any move in the federal funds target, which means the share of the debt that answers directly to the Federal Reserve is now larger than at any fiscal year end since the pandemic borrowing wave. The Fed raised rates in September and the October 7 minutes showed most officials expect another increase. A government that funds 22 cents of every marketable dollar in bills feels that decision almost immediately. The running total sits on the US national debt page, and the benchmark that moves with it is tracked on the Fed prime rate page.
Key Takeaways
- Treasury bills ended fiscal 2026 at $7.118 trillion, or 22.36% of marketable debt, the highest fiscal year end share since 2020.
- Bills grew $721.1 billion over the year and absorbed roughly a third of all new marketable borrowing.
- Interest accrued on bills fell to $254.12 billion from $271.74 billion, because the Fed cut rates for most of the year.
- Total interest expense still climbed to $1.360 trillion from $1.220 trillion, driven by notes and bonds.
- Prime stands at 7.00% and the FOMC next meets October 27 and 28.
Table of Contents
What the Fiscal 2026 Statement Shows
Treasury publishes the composition of the debt once a month, and the September 30 edition closes the fiscal year. It records $7,118,145 million of bills, $16,281,507 million of notes, $5,551,018 million of bonds, $2,172,642 million of inflation protected securities and $707,975 million of floating rate notes. Added together, marketable debt finished the year at $31.835 trillion. Bills are 22.36% of that figure. The share was 21.53% at the end of fiscal 2025 and 15.38% at the end of fiscal 2022. The only recent fiscal year with a higher reading is 2020, when emergency pandemic borrowing pushed bills to 24.68% of a much smaller portfolio.
The level of debt draws more attention than its structure. Debt to the Penny put total public debt outstanding at $40,305,316,210,829.72 on October 8, with $32.454 trillion of that held by the public. The structure underneath that total has changed faster than the total itself. Four years ago roughly one marketable dollar in six was a bill. Today it is closer to one in four and a half. Treasury has leaned on the front end because bill auctions are deep and flexible, absorbing swings in cash needs without larger quarterly note and bond sales. The cost of that flexibility is that a rising policy rate reaches the federal interest bill in weeks instead of years.
Where the $721 Billion in New Bills Went
Marketable debt grew $2.120 trillion in fiscal 2026. Bills supplied $721.1 billion of that increase, notes supplied most of the rest, and floating rate notes shrank slightly. The pattern is visible in the weekly auction calendar. Treasury sold $95 billion of 13 week bills and $82 billion of 26 week bills on October 5, then $110 billion of 4 week bills and $105 billion of 8 week bills on October 8. Three more bill auctions settle this week, with $95 billion of 6 week paper, $95 billion of 13 week paper and $82 billion of 26 week paper scheduled for Tuesday, October 13. That is $272 billion of short dated supply in a single session.
Demand has held up. The 13 week sale on October 5 drew a bid to cover ratio of 2.51 at a 4.149% investment rate, the 26 week drew 2.79 at 4.314%, and the 17 week sale on October 7 drew 3.10 at 4.219%. The 4 week auction on October 8 was the weakest of the group at 2.40 times covered, still comfortably above the 2.30 level that signals strain.
Why Bills Got Cheaper, and Why That Reverses
Here is the result that looks backward at first glance. Treasury added $721.1 billion of bills and paid less for them. Interest accrued on bills totaled $254.12 billion in fiscal 2026 against $271.74 billion in fiscal 2025, a drop of $17.62 billion on a stock that grew 11%. The average interest rate carried on bills fell to 3.870% in September from 4.187% a year earlier. The explanation is the policy path. The Fed was cutting through most of fiscal 2026, and every maturing bill rolled into a cheaper one within weeks. Notes and bonds did the opposite, repricing older low coupon issues into higher ones, which lifted note interest to $498.31 billion from $424.92 billion.
Total interest expense on the debt still rose, to $1,360.40 billion in fiscal 2026 from $1,220.03 billion the year before, an increase of $140.37 billion. The weighted average rate on all interest bearing debt finished September at 3.531%, up from 3.363%. The mechanism that held bill costs down has now flipped. The September 16 meeting lifted the target range to 3.75% to 4.00% and prime moved to 7.00%. Each quarter point adds roughly $17.8 billion a year to the cost of a $7.118 trillion bill book once it fully turns over, and most of it turns over inside six months.
What a Front Loaded Debt Means for Your Rates
Household borrowing costs run on the same clock as the Treasury bill book. Credit cards, home equity lines and most variable rate personal loans are priced off prime, which tracks the top of the federal funds target range plus three points. Prime has sat at 7.00% since September 17. Bill yields are the market’s read on where that target goes next, and the October 9 H.15 release showed the secondary market curve running from 3.97% at four weeks to 4.23% at one year. The chain from a policy decision to a statement balance is laid out on the how the Fed affects loans page.
The split matters for savers and borrowers in opposite directions. Deposit pricing follows the front end, so the same bill yields that raise Treasury’s costs support what banks pay on certificates of deposit and high yield savings accounts. Fixed rate credit works the other way. A fixed personal loan locks the rate for the full term, which is worth more when the next move points up. Mortgages are the exception, since 30 year pricing follows the 10 year Treasury at 5.22% and the 30 year at 5.60% rather than prime, as the current mortgage rates page shows.
Pro Tip
If you hold a variable rate balance, treat October 27 and 28 as a pricing date and not just a news event. At 7.00% prime, a card set at prime plus 13 points sits near 20% APR, and a quarter point increase adds about $2.08 a month for every $10,000 you carry. On a $12,000 balance that is roughly $30 a year. If you are shopping a term loan, compare the fixed quote against the variable one on the assumption that prime rises once more, not that it holds.
Frequently Asked Questions
What share of marketable federal debt is Treasury bills?
Treasury bills were 22.36% of marketable federal debt on September 30, 2026, the close of fiscal 2026. Bills outstanding totaled $7.118 trillion out of $31.835 trillion of marketable securities. That is the largest fiscal year end share since 2020, up from 21.53% a year earlier.
What is the difference between Treasury bills and government securities?
Government securities is the broad category, and bills are one type inside it. Bills mature in a year or less and are sold at a discount with no coupon. Notes run two to ten years, bonds run twenty or thirty, and both pay interest twice a year. Treasury also issues nonmarketable securities such as savings bonds and the Government Account Series held by federal trust funds, which cannot be traded between investors.
Is the US national debt currently $40 trillion?
Yes. Total public debt outstanding was $40,305,316,210,829.72 on October 8, 2026, the most recent daily reading in Treasury’s Debt to the Penny series. Of that, $32.454 trillion was held by the public and the remainder was intragovernmental holdings owed to federal trust funds. The total crossed $40 trillion for the first time in August 2026 and closed fiscal 2026 at $40.172 trillion on September 30.
Who is the interest on the national debt owed to?
Most of it goes to holders of marketable securities, a group that includes banks, pension funds, mutual funds, insurers, individual investors, the Federal Reserve and foreign buyers. The rest is credited to federal trust funds through the Government Account Series. Of the $1,360.40 billion of interest expense recorded in fiscal 2026, $1,068.46 billion was interest on public issues and $291.93 billion was credited to those internal accounts rather than paid out to investors.
Did the Treasury buy back debt?
Yes, and it continues to do so on a published schedule. In the liquidity support operation held October 8, 2026, Treasury accepted $6.0 billion par of nominal coupon securities maturing in twenty to thirty years, selecting ten issues from $14.886 billion of offers across thirty four eligible securities. A separate operation on October 6 accepted $1.327 billion in the two to three year bucket. The program repurchases older, less liquid issues and is funded with new auctions, so it changes the shape of the debt rather than its size.
What does a bigger bill share mean for my credit card rate?
Indirectly, it means the government and the cardholder now feel the same decision on a similar timetable. Card APRs tied to prime reset within a billing cycle or two of an FOMC move, and a larger bill book means federal interest costs reset almost as quickly. Neither effect changes your rate on its own. What changes it is the target range itself, which stands at 3.75% to 4.00% with prime at 7.00%, and the next scheduled opportunity to move it is October 28.
Watching the October Meeting and the Next Refunding
The FOMC meets October 27 and 28, and a quarter point increase would lift prime to 7.25% and pass through to bill auctions within days. Treasury’s next quarterly refunding statement will show whether the department keeps funding at the front end or starts shifting weight back into notes and bonds. September data releases resume Tuesday after the Columbus Day holiday. Follow the policy path on the Fed rate forecast page, the carrying cost on interest on the national debt, and the curve on the Treasury yield curve page.
References
- U.S. Department of the Treasury, Fiscal Data, Monthly Statement of the Public Debt, Summary of Treasury Securities Outstanding, September 30, 2026 and September 30, 2025.
- U.S. Department of the Treasury, Fiscal Data, Interest Expense on the Public Debt Outstanding, fiscal year to date totals through September 30, 2026.
- U.S. Department of the Treasury, Fiscal Data, Average Interest Rates on U.S. Treasury Securities, September 30, 2026.
- U.S. Department of the Treasury, Fiscal Data, Debt to the Penny, daily series through October 8, 2026.
- U.S. Department of the Treasury, Fiscal Data, Auctions Query, results and announcements for September 23 through October 13, 2026.
- U.S. Department of the Treasury, Fiscal Data, Treasury Buybacks Operations, operations dated October 6 and October 8, 2026.
- Board of Governors of the Federal Reserve System, H.15 Selected Interest Rates, released October 9, 2026.
- Board of Governors of the Federal Reserve System, Calendar, October 2026, FOMC meeting of October 27 and 28 and the Columbus Day release shift.
